We use a time dependent, microphysical cloud model to study the formation of carbon dioxide clouds in the Martian atmosphere. Laboratory studies by Glandor et al. show that high critical supersaturations are required for cloud particle nucleation and that surface kinetic growth is not limited. These conditions, which are similar to those for cirrus clouds on Earth, lead to the formation of carbon dioxide ice particles with radii greater than 500 micrometers and concentrations of less than 0.1 cm(exp -3) for typical atmospheric conditions. Within the current Martian atmosphere, CO2 cloud formation is possible at the poles during winter and at high altitudes in the tropics during periods of increased atmospheric dust loading. In both cases, temperature perturbations of several degrees below the CO2 saturation temperature are required to nucleate new cloud particles suggesting that dynamical processes are the most common initiators of carbon dioxide clouds rather than diabatic cooling. The microphysical cloud model, coupled to a two-stream radiative transfer model, is used to reexamine the impact of CO2 clouds on the surface temperature within a dense CO2 atmosphere. The formation of carbon dioxide clouds leads to a warmer surface than what would be expected for clear sky conditions. The amount of warming is sensitive to the presence of dust and water vapor in the atmosphere, both of which act to dampen cloud effects. The radiative warming associated with cloud formation, as well as latent heating, work to dissipate the clouds when present. Thus, clouds never last for periods much longer than several days, limiting their overall effectiveness for warming the surface. The time average cloud optical depth is approximately unity leading to a 5-10 K warming, depending on the surface pressure. However, the surface temperature does not rise about the freezing point of liquid water even for pressures as high as 5 bars, at a solar luminosity of 75% the current value.